Mega-funds push 2005 fundraising past $200bn

The rise of the mega-fund in 2005 may push global private equity fundraising to record levels, according to the latest research.

Global private equity fundraising in 2005 has exceeded $200 billion (€169 billion) according to research group Private Equity Intelligence.
The research company said that $201 billion had been raised worldwide from 329 new private equity funds as of November 21 2005.
Of that figure, 199 new US-based funds have raised $116 billion; 83 new European-based funds have raised $66 billion; and 47 funds based in Asia and the rest of the world have raised $19 billion.
Unsurprisingly, buyout funds proved most attractive to investors, garnering $115 billion between them, of which nearly $48 billion came from just seven mega LBO funds.

These mega-funds were: Goldman Sachs GS Capital Partners V, which closed on $8.5 billion in April; Warburg Pincus Warburg Pincus Private Equity IX ($8 billion, August); The Carlyle Group’s Carlyle Partners IV ($7.85 billion, March); BC Partners’ BC European Capital VIII (€5.8 billion, July); Apax Partners’ Apax Europe VI (€4.3 billion, July); and Kohlberg Kravis Roberts’ KKR European Fund II ($4.5 billion, October).

However, these figures exclude outsized funds yet to make a final close, including Blackstone Group, which has a target of $12.5 billion, Apollo Management ($10 billion target), and Thomas H Lee Partners ($7.5 billion target).

A report from Private Equity Analyst in October also showed mega-funds to be dominating fundraising in 2005. The report said that LBO funds had amassed $70.1 billion in fresh funding in the first nine months of the year, with eight buyout funds accounting for almost half the total.

The Private Equity Intelligence report also noted that, in 2005 so far, 118 venture funds raised $29 billion; 28 funds of funds raised $12 billion; 16 mezzanine funds raised $6 billion; nine secondaries raised $5 billion; and five distressed debt funds raised $3 billion.
According to a release, Private Equity Intelligence is forecasting a total of $230 billion to $240 billion for the full year – close to the record of $242 billion set in 2000.